ISA S&S £2 platform fee on £100 per month investment

bongoali

Hi,

Started investing for the first time this year, and chose ISA S&S.

At the moment the amount invested is £100 per month and have no plans to change that.

The fund chosen is a Vanguard Lifestrategy through H&L.

The monthly fees are £2 and I'm wondering if choosing a fund with a fee is cost effective when the investment is only £100 per month.

Any suggestions please?

Thanks

jimjames

Depends if you want that fund or not. I think there are very few other places that sell it. You may find it better to use another non-fee fund to build up your portfolio and then switch once you get above £1000 so you are not being hammered by charges

BLB53

Vanguard's main attraction is their ultra-low management charges. Paying HL a platform fee of 2% sort of defeats the object.

This article on Monevator may help

http://monevator.com/cheap-vanguard-index-funds/

atypical

I asked the same question here:
https://forums.moneysavingexpert.com/discussion/comment/57817955#Comment_57817955

No fees at all with TD Direct (administration fee based on portfolio value doesn't apply to their regular savings account).

bongoali

Thanks folks, really appreciate your help.

Thanks atypical - just what I was looking for... will look into transferring now! Only got £1000 in at moment. investing £100 per month for 15-20 years is the aim.

bongoali

THanks BLB53

bongoali

Shizzle!! £25 + VAT to transfer £1000 out of H&L to keep the 'ISA wrapper'. Just paid £20 for 10 months fees!

Think I will just withdraw as cash for now and start a new S&S ISA with TD April 2013 and chalk this one up to experience.

jem16

bongoali wrote: »

Shizzle!! £25 + VAT to transfer £1000 out of H&L to keep the 'ISA wrapper'. Just paid £20 for 10 months fees!

Think I will just withdraw as cash for now and start a new S&S ISA with TD April 2013 and chalk this one up to experience.

That's not quite right. If you want to transfer out in specie ( ie keep the fund without selling) it costs £25+VAT.

To avoid the fee, the fund must be sold and transferred to another ISA as cash. You do not lose the ISA wrapper. So get TD to initiate the transfer. They will then request the transfer from HL as a cash transfer and HL will sell the fund before transferring. Obviously this means you are out of the market for a few days whilst the transfer takes place. You could win or lose.

dtsazza

bongoali wrote: »

Shizzle!! £25 + VAT to transfer £1000 out of H&L to keep the 'ISA wrapper'. Just paid £20 for 10 months fees!

Think I will just withdraw as cash for now and start a new S&S ISA with TD April 2013 and chalk this one up to experience.

If there's only £1000 in the account and you're investing £100/month, then there won't be any problem with this as you'll still be well within your ISA allowance.

Perhaps it's even for the best - you get the experience benefits of being "burned" by fees, but (this time) have a good way to work around them.

bongoali

JEM16 - thanks. I will enquire about that tomorrow.

DTSAZZA - thanks. I have got a cash ISA for this year's allowance already though with Halifax. So not sure how that impacts my options.

I did ask H&L can I withdraw as cash in my bank (not cash ISA) and then stick it in TD S&S ISA using this year's allowance but they said I can't open two S&S ISA for this year's allowance with 2 different providers.

jem16

bongoali wrote: »

I did ask H&L can I withdraw as cash in my bank (not cash ISA) and then stick it in TD S&S ISA using this year's allowance but they said I can't open two S&S ISA for this year's allowance with 2 different providers.

That bit's correct.

If you don't want to lose this year's allowance then transfer as cash as opposed to stock to save the transfer fee.

However some providers will pay the transfer fee for you, so might be worth asking TD if they will. Of course you may still hit a brick wall as HL may still not allow an in specie transfer.

Your cash ISA has nothing to do with this as it's totally separate.